Fury as Shell rakes in record $9.6bn first quarter ‘profit bonanza’
Shell has sparked fury by raking in a record $9.6bn (£7.6bn) profit in the first quarter of the year while households struggled with soaring energy bills.
The “profiteering bonanza” fuelled calls for a tougher windfall tax on oil giants accused of cashing in on higher energy prices due to Russia’s invasion of Ukraine.
The update from Shell came just days after rival BP reported its second-highest profit on record for the first quarter, of $4.7bn (£3.7bn).
MPs and unions accused energy firms of “treating the British public like cash machines”, while criticising the government for “failing to impose a proper windfall tax”.
Shell’s $9.6bn profit for the first three months of the year was up from $9.1bn in the same period a year ago. It said oil prices averaged $81.7 per barrel in the quarter, down from $102.2 per barrel a year ago.
And boss Wael Sawan said the company delivered a “robust” performance “against a backdrop of ongoing volatility”.
Shell’s share price rose as it announced plans to hand shareholders $4bn in the coming months through the form of share buybacks. That will bring the amount handed to investors in the first half of this year to around $12bn, it said.
Sharon Graham, general secretary of the Unite union, said BP and Shell’s “profiteering bonanza” is “one of the corporate scandals of our times”. And she said the profits were “practically untouched by Rishi Sunak’s so-called windfall tax”.
And Labour’s energy and net zero secretary Ed Miliband said it was “staggering” Mr Sunak would not implement a “proper windfall tax”.
Last year, Shell’s profit rose to a record high of nearly $40bn, but the oil giant paid just $134m under the windfall tax introduced last May. The company expects that figure to rise to more than $500m this year after the energy profits levy rose in January.
Critics say the current levy is too generous to oil firms, with built-in tax breaks for firms based on the amount they invest in the UK.
In the first quarter of 2023, Shell generated strong results, navigating a volatile market with discipline and strength.
Hear more from Shell CFO Sinead Gorman. #ShellResults https://t.co/Cf4LlMxhcC pic.twitter.com/SMVouc6f64
— Shell (@Shell) May 4, 2023
Liberal Democrat leader Sir Ed Davey said the prime minister’s “refusal to close windfall loopholes” shows the government is “out of touch”.
He said: “Energy giants like Shell should not be able to rake in huge profits while families across the country are struggling to make ends meet.
“Shell’s latest profits once again demonstrate the urgent need for a robust windfall tax on big energy companies.
“Rishi Sunak’s refusal to close windfall loopholes for big energy companies shows just how out of touch this Conservative government is with the struggles that families are facing right now.”
And the Trades Union Congress said Shell’s “sky-high” profits show Britain’s energy market is “fundamentally broken”.
General secretary Paul Nowak said: “These sky-high profits beg the question – will the government ever have the backbone to tax the energy giants properly?
“While families across Britain have struggled to heat their homes, Shell has enjoyed a record cash bonanza.
“Our energy market is fundamentally broken. Struggling households shouldn’t be lining the pockets of shareholders and fat cat CEOs.
“We could all have lower bills if the government taxed excessive profits, introduced a social tariff and created public ownership of new clean power.”